ENGG 209 Chapter Notes - Chapter 13: Mansfield
16 Dec 2016
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Used to determine whether a project is in the public interest or not. In the public sector, the goal is no longer to maximize wealth of a corporation: use bca instead of previous methods. Three kinds of problems: maximize benefits for a given set of costs, maximize net costs given a variable set of costs, minimize costs to achieve a given set of benefits. Must place a monetary value to all costs and benefits. Identify all benefits and disbenefits to the user: quantify these in terms of dollar amounts. Identify and quantify costs to the sponsor: determine equivalent net costs and benefits at a base time using the appropriate discount rate, accept if user benefits exceed sponsor"s costs. User benefits: primary effects: directly impact the user, secondary effects: indirectly impact the user, overall benefit b is difference between benefits and disbenefits, examples: time saved / lost, operating costs, parking costs.
